Wednesday, October 6, 2010

Harvard Professor to Fed you can't grow the economy by printing money

If it was that easy wouldn't we print money every year to grow the economy?  What people like him are worried by printing money the Fed will cause inflation with high unemployment, like in the 1970's.  This means higher mortgage rates and pressure on home prices.

More Fed purchases of financial assets is "good for the bank," says Jeffrey Miron, a Harvard economics professor and a senior fellow at the Cato Institute. "But I don't see it having a very big affect in tricking down in terms of getting more investment, more lending."
And criticism on the Obama Administration
Policy Missteps: Like many conservatives, Miron believes the Obama administration is more focused on "redistributing the pie" vs. growing the pie. "You never hear ‘we need to do things like keep tax rates on capital income low,' and other incentives to keep people productive," he says. "That's part of what the private sector is missing and why we're not going to see growth for a while."
Watch it all

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